Correlation Between Bentley SystemsInc and Agilysys

Can any of the company-specific risk be diversified away by investing in both Bentley SystemsInc and Agilysys at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bentley SystemsInc and Agilysys into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bentley SystemsInc and Agilysys, you can compare the effects of market volatilities on Bentley SystemsInc and Agilysys and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bentley SystemsInc with a short position of Agilysys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentley SystemsInc and Agilysys.

Diversification Opportunities for Bentley SystemsInc and Agilysys

0.37

Correlation Coefficient

Bentley SystemsInc  Agilysys

Weak diversification

The 3 months correlation between Bentley and Agilysys is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bentley SystemsInc and Agilysys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilysys and Bentley SystemsInc is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bentley SystemsInc are associated (or correlated) with Agilysys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilysys has no effect on the direction of Bentley SystemsInc i.e., Bentley SystemsInc and Agilysys go up and down completely randomly.

Pair Corralation between Bentley SystemsInc and Agilysys

Considering the 90-day investment horizon Bentley SystemsInc is expected to generate 0.94 times more return on investment than Agilysys. However, Bentley SystemsInc is 1.07 times less risky than Agilysys. It trades about 0.08 of its potential returns per unit of risk. Agilysys is currently generating about 0.0 per unit of risk. If you would invest  4,999  in Bentley SystemsInc on January 25, 2024 and sell it today you would earn a total of  443.00  from holding Bentley SystemsInc or generate 8.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bentley SystemsInc  vs.  Agilysys

Bentley SystemsInc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bentley SystemsInc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Bentley SystemsInc may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Agilysys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agilysys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Agilysys is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bentley SystemsInc and Agilysys

The main advantage of trading using opposite Bentley SystemsInc and Agilysys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bentley SystemsInc position performs unexpectedly, Agilysys can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Agilysys will offset losses from the drop in Agilysys' long position.

The idea behind Bentley SystemsInc and Agilysys pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.